Monetary screening threshold reduced
From 10:30pm on 29 March 2020, the monetary screening threshold for foreign investments under the Foreign Acquisitions and Takeovers Act 1975 (Cth) was reduced to $0. This temporary measure, implemented as part of the Australian Government’s response to the COVID-19 outbreak, seeks to protect Australian assets and businesses from takeovers and market manipulation.
Prior to this measure taking effect, the thresholds for foreign investments requiring approval from the Foreign Investment Review Board (FIRB) varied from $1.192 billion to $275 million to $0 depending on the country from which the buyer was based and the nature and value of the proposed acquisition. As a result of the temporary reduction, all proposed foreign investments into Australia will now require approval under the Act, regardless of the nature or value.
Timing for application extended
In addition to effectively removing the monetary screening threshold, FIRB’s statutory time frame for approving investment proposals has been extended from 30 days to up to 6 months. FIRB has advised that they will seek to prioritise proposals that are aligned with the national interest of protecting Australian businesses and supporting jobs.
Exemptions still apply
Importantly, there has been no change to threshold exemptions within the Act. Foreign entities seeking investment opportunities in Australia may wish to consider whether any exemptions to requiring FIRB approval may be available to them.